Group Purchasing

Processing of buyers coming together to make a single bid/transaction for an offering, in order to get a lower price.

Why might a seller accept a lower price for a big purchase? (Economies Of Scale)

• lower manufacturing cost for big batches (Setup Cost)
• lower CostOfSales
  • reduce need for Advertising
  • avoid cost of negotiating/closing many individual transactions (gives talks to big groups of employees, rather than 1-on-1 Q And A)
  • lower account servicing cost

Does this justify Price Discrimination?

How does the Robinson Patman Act apply? http://en.wikipedia.org/wiki/Robinson%E2%80%93Patman_Act